The death of Baby Peter has led to a "chronic shortage" of foster carers, a charity warned today.

According to the Fostering Network, there are 10,000 fewer foster families than are needed after an "unprecedented rise" in the number of children being taken into care.

With looming public sector cuts expected to put more pressure on local government resources, the fostering system could collapse, the charity said.

In a report titled Bursting at the Seams, it said nearly six in 10 local authorities were having difficulty finding the right homes for children. Only a third said they had been able to find appropriate placements.

In total, 53,934 children in the UK needed a foster home in 2009, compared with 51,009 in 2007.

Writing in the Independent, the Fostering Network chief executive, Robert Tapsfield, said the increase in the number of younger children coming into care had arisen after the death of Baby Peter, which came to light in 2008.

"Foster care is in trouble. There are more and more children coming into care and many of them have increasingly complex needs," he said. "There is also a chronic shortage of foster carers across the UK. With the reality of severely reduced local authority spending lurking around the corner, the system could collapse."

Helen Clarke, the report's author, said: "While fostering services had made real progress in recruiting more foster carers and finding children the right foster homes, the unprecedented pressure the system is now under has clearly pushed back much of this good work.

"The impact of the rise in children needing foster homes and the shortage of foster carers means the system is no longer sustainable and budget cuts could be devastating."

Baby Peter died aged 17 months in 2007. He suffered 50 injuries despite receiving 60 visits from social workers, doctors and police over the final eight months of his life. His mother, Tracey Connelly, her boyfriend, Steven Barker, and his brother, Jason Owen, were jailed in May last year for causing or allowing his death.